In October, the UK economy experienced a continued slight contraction, primarily due to a decline in industrial production, according to official data released on Friday. The Office for National Statistics reported an unexpected 0.1 percent decrease in real gross domestic product for October, mirroring the decline in September. Projections had anticipated a 0.1 percent growth in GDP.
Services output remained stagnant in October, while industrial production saw a 0.6 percent downturn, attributed to decreased outputs in both manufacturing and mining and quarrying.
Industrial production had been expected to increase by 0.3 percent, following a 0.5 percent decline in September. Within the industrial sector, manufacturing output fell by 0.6 percent after a previous 1.0 percent decrease, and mining and quarrying output dropped significantly by 3.1 percent.
Furthermore, construction output decreased by 0.4 percent, diverging from the 0.1 percent rise in September.
Year-on-year, GDP growth improved to 1.3 percent compared to 1.0 percent in September, although it still fell short of the anticipated 1.6 percent growth.
In the three months leading up to October, the economy recorded modest growth of 0.1 percent. Services output increased by 0.1 percent, and construction rose by 0.4 percent. However, these gains were partly counterbalanced by a 0.3 percent decline in production output. "While the figures this month are disappointing, we have implemented strategies to ensure sustained economic expansion," stated Chancellor Rachel Reeves.
ING economist James Smith indicated that growth is expected to surpass much of Western Europe next year, influenced by the recent budget, though he noted there are more apparent downside risks than upside opportunities.
Further data from the ONS revealed that the visible trade deficit expanded to GBP 18.96 billion from GBP 16.32 billion in the previous month, with an anticipated shortfall of GBP 16.1 billion.
Meanwhile, the services surplus increased to GBP 15.3 billion from GBP 12.9 billion the prior month, resulting in an overall trade deficit of GBP 3.7 billion compared to a GBP 3.5 billion deficit in September.
Earlier, a survey conducted by market research group GfK indicated a slight improvement in British consumer confidence for December, with the consumer sentiment index inching up by one point to -17.
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